* Record global coffee crop seen in 2012/13
* May robusta coffee premium widens
* Talk of Ivorian cocoa sales after price surge
(Adds closing prices of sugar and coffee.)
By Rene Pastor and Nigel Hunt
NEW YORK/LONDON, March 9 Arabica coffee
futures on ICE Friday retreated toward the 16-month low set
earlier this week as prospects of a record global crop in
2012/13 threw the market on the defensive.
ICE cocoa extended the gains from its technically driven
surge of Thursday, while sugar drifted lower in dull dealings.
May arabica dropped 3.20 cents or 1.7 percent to
close at $1.862 a lb. The session low was at $1.856, just a hair
above the $1.851 hit on Thursday, the lowest level for the
second month since mid-October 2010.
Prices have fallen nearly 40 percent from peaks hit in May
2011 as the prospect of a much larger global crop in 2012/13 has
helped to ease concerns about tight supply and dampen investor
appetite for the commodity.
"The market is now well off those (2011) highs and there has
been a growing feeling as 2012 progresses that there is
currently more downside potential than upside for the market
given the prospect of a return to world surplus in 2012/13,"
said Andrea Thompson, analyst at CoffeeNetwork, a subsidiary of
INTL FC Stone.
World coffee production was projected to rise to a record
146 million (60-kg) bags in 2012/13, up 11 million bags from
2011/12, Thompson said in a report.
"Given the outlook of a record crop in Brazil, financial
investors are betting on falling prices and are thereby
contributing to the price slide," Commerzbank said in a report.
"In view of the continued tight supply, we regard the price
slide to below the $2 per lb mark as unsustainable and expect
arabica prices to recover in the coming months," it added.
International Coffee Organization head Roberio Oliveira
Silva also said on Thursday the he did not see the fall in
prices continuing due to growing demand.
Dealers said there may be scope for a short covering rally
in the near future.
Country Hedging analyst Sterling Smith said the softs
complex will continue to be influenced by developments in global
"Commodities are going to be hostage to macro developments,"
The May robusta contract on Liffe fell $38 or 1.8
percent to finish at $2,050 per tonne, with the focus remaining
on possible tightness in available deliverable supplies and a
widening premium to July LRC-2=R.
Dealers noted talk that one market participant might be
building a large long position in the May contract was
reinforced by large options trade earlier this week.
May's premium to July widened to around $57, up from around
$50 at the close on Thursday.
COCOA FIRMER, SUGAR FALLS
Cocoa extended the technical advance it posted in the
previous session while sugar futures drifted lower.
May cocoa on ICE gained $15 to conclude at $2,410 a
tonne. May cocoa on Liffe rose 16 pounds, or 1.04
percent, to settle at 1,556 pounds a tonne.
Sugar eased, with the sweetener weighed in part by a global
sugar supply surplus in 2012/13.
Raw sugar prices on ICE turned lower with May down
0.30 cent, or 1.25 percent, to end at 23.66 cents a lb and
London May white sugar futures slid $8.10, or over 1.2
percent, to close at $625.50 per tonne.
Smith believes raw sugar will probably consolidate around 23
"The latest crop progress reports indicate only little
change in the global sugar market fundamental picture," the
International Sugar Organization said in a market update.
"A significant excess of global production over consumption
in 2011/12 is still widely expected," the report added.
(Additional reporting by Michelle Martin in London; Editing by